Institute of Development Studies

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An Upside Down View of Governance

Informal institutions and personalised relationships are usually seen as governance problems. However the research presented in this synthesis paper suggests that they can also be part of the solution. Donors have had limited success in trying to improve the investment climate, reform public services and fight corruption in poor countries by strengthening formal, rules-based institutions. They need to stop thinking about governance and development challenges in terms of models based on OECD experience, and instead pay much more attention to the informal institutions, relationships and interests that underpin formal arrangements.